A CHINESE WEEKLY OF NEWS AND VIEWS mmi

Vol. 32, No. 1 January 2-8, 1989 Progress and Problems in a Decade's Reform • Shandong Peninsula Strengthens Investment Climate

CHINA'SlM OF A GL POLITICAJ A wave in the tide of humanity. by Zhu Suifeng

\ BEIJING HIGHLIGHTS OF THE WEEK REVIEW Gandhi's Visit Warms Sino-lndlan Relations

VOL. 32 NO. 1 JAN. 2-8,1989 • Indian leader Rajiv Gandhi visited China from De• cember 19-23, 1988 and became the first Indian prime minister to do so in 34 years. His visit was generally CONTENTS considered a genuine starting point for improved rela• tions. Both countries expressed a readiness to solve prob• NOTES FROM THE EDITORS 4 lems that hinder such progress, especially the boundary World Pressed for New one, through peaceful and friendly consultations (p. 5). Political Order EVENTS/TRENDS 5-10 Sino-Indian Relations The World Enters an Era of Relative Detente Usher a New Era 'No'to Taiwan's Elastic • With the relaxing of Soviet-US relations, some diffi• Diplomacy cult problems, including regional conflicts, have shown Reforms Crack 'Iron Rice , signs of political resolution. The superpowers have be• Bowl' gun to shift the focus of their competitive strategies Foreigners Watch Satellite: from arms to comprehensive national strength. As the world is becoming multipolar, the international detente Launching will stay on for a comparatively long period, (p. 11). China's Top 10 News Events in 1988 Xinjiang Railway Under From 1978 to Now, and On Construction INTERNATIONAL • Liu Guoguang, vice-president of the Chinese Acade• Relative Detente Befalls my of Social Sciences, casts a critical eye over the urban the World 11 and rural economic reforms of the last ten years. As he Top 10 world News Events points out, the gains have been enormous. But if they are of 1988 13 to be sustained and continued, then care must be taken A Mideast Peace in selecting the right policies from the various contend• Breakthrough 15 ing proposals now being put forward in Chinese econo• mic circles (p. 18). CHINA Economic Reform: A sweet and Sour Decade 18 Shandong Peninsula (1): A A Headland of Economic Progress Head Land of Economic Progress 25 • Since the Shandong Peninsula was declared an open economic zone in March 1988, its industry and agricul• BUSINESS/TRADE 30-31 ture have concentrated on becoming increasingly export- CULTURE/SCIENCE 32-33 oriented. At the same time, infrastructural construction LETTERS 34 has been accelerated and a series of preferential mea• COVER: For global peace sures drawn up to attract overseas investment and eco• through the coming year. nomic co-operation (P. 25). ,

Director/Editor-in-Chief: Wang Youfen • PublJstied every Monday by Subscription rates (1 year): Tel; 893363 BEIJING REVIEW Australia ..A.$29.00 TLX: 222374 FLPDACN 24 Baiwanztiuang Road, Beijing 100037 New Zealand NZ.$39.00 FAX:8314318 The People's Republic of China UK .A14.50 Distributed by China International Book General Editorial Office Tel: 8314318 USA US$29.00 '.Tt^ing Corporation (GUOJISHUDIAN) Canada. ..Can.$25.00 English DeptTel: 831,5599 Ext. 546 f, P0%ox 399, Beijing, China FRIOM .mas iiiiDiiBiss World Pressed for New Political Order by Our Guest Commentator Wan Guang he world is faced with a blocs, a tendency towards in• in sight at the end of the long T mission to set up a new dependence has also increased tunnel of regional conflicts. international political or• considerably, and hegemonism This is a period of transi• der based on the Five Princi• and power politics are getting tion, in which new ideas are ples of Peaceful Co-existence nowhere. emerging and old powers are (mutual respect for sovereign• To strive for a sphere of in• resisting. The old and new ty and territorial integrity, fluence, the superpowers have forces are interlocking and mutual non-aggression, non• launched onP' aggressive war conflicting with each other. interference in each other's in• after anothe*, causing enor• Though hegemonism and pow• ternal affairs, equality and mous damage to the various er politics are increasingly un• mutual benefit, and peaceful: fashionable, they are nonethe• co-existence). less still on the historical This new international polit• stage. The international situa• ical order is to be in contrast tion has tended to ease, but with the old one. For centu- the world is still bedevilled iries, international relations Too establish a new by many problems. Many new were dominated by power pol• conflicts and clashes are likely itics in which the large, strong international political to arise, and there might be and rich bully the small, weak order means to eliminate twists and turns in the process and poor. Since the end of of international detente. World War II, tremendous hegemonism and power Peace and development are changes have taken place, yet politics from the urgent needs of human• the old international political kind today. Inter-state rela• order still prevails. international relations tions should be handled pro• The superpowers pursued and implement the Five perly in order to shepherd hegemonism, organized mil• Principles of Peaceful global peace and guarantee itary blocs, engaged in a large- the independence and security scale arms race and contended Co-existence. needed of the world's various worldwide for their sphere of countries so that they may de• influence. Together these led vote themslves to their own to the tensions in international development. Therefore, it is relations. now time to advance the con• -However, the trend of inde• parts of the world. Regional cept of setting up a new inter• pendence since the last world hegemonists have also fol• national political order. war rolls on irresistably, giv• lowed suit, only to find that To establish a new interna• ing birth to the independence their aggressive wars, like tional political order means of a large number of colonies those initiated by the super• to eliminate hegemonism and and semi-colonies. These na• powers, are destined to fail. power politics from interna• tions have now sprung from In the long course of the tional relations and implement being the ruled and suppressed arms race and foreign expan• the Five Principles of Peaceful to being an independent force sion, the superpowers have Co-existence. that influences and propels the weakened themselves, and The five principles were first development of the world. The their influence on the world introduced jointly by China various small- and medium- has dwindled accordingly. and some of its Asian neigh• sized countries in the world Today, the post-war era, bours in the 1950s as the basic are now all conscious of characterized by a bipolar mil• guidelines in dealing with in• maintaining their sovereignty, itary confrontation, is nearing ternational relations. They struggling for equality and its end, and a hew trend were the product of the bloom• playing a digger role in world of dialogue and detente is ing movement for national in• affairs.' 'Within the military apppearing. There: is also light dependence after World War

4 ('BHU5NG REVIEW, JANUARY 2-8, 1989 EiVENlTS/TRENDS II, and therefore were clearly earmarked as a part of the historical trend towards inde• Sino-lndian Relations pendence. They were proposed in opposition to the old inter• Usher a New Era national political order and he winter wind prevailing past and set their eyes on the served as a foundation for es• T in Beijing recently was future. tablishing a new international warmed by an Indian Gandhi said the differences political order. Ocean current brought by In• between China and India had International practices since dian Prime Minister Rajiv not reduced their common World War II have demon• Gandhi, who told the' Chinese bonds. Both countries have strated that the five principles government and people that waged political struggles to are the best and most durable his government will work hard gain independence, and their tools to use in international re• towards the invprovemnet of economic battles are continu• lations. These principles fair• bilateral relatiqas, and. the re• ing, he said. ly reflect the fundamental in• solution of the;border prob• Deng said that now people terests of countries all over the lem. I are referring to thejiiext centu• world. They apply not only to Gandhi's visit, from Decem• ry as the Asian-Pacific centu• countries with different social ber 19-23, 1988, made him the ry. However, the true Asian- systems but to those with sim• first Indian prime minister to Pacific century will not come ilar systems, too. They can come to China since 1954, unless economic muscle is guarantee that a friendly and when the late Indian leader gained by the developing co-operative relationship will Jawaharlal Nehru visited. The countries, including China be set up among the world's current talks, according to and India, whose combined po• nations and therefore are in Chinese senior leader Deng pulations of 1.8 billion exceed conformity with the world's Xiaoping, marked a genuine one third of the world's total. urgent need for peace and de• improvement of the relation• Gandhi's' first day in Beijing velopment. This being the ship. was basically taken up by talks case, these principles are being The Indian leader also with Chinese Premiet Li Peng. accepted by more and more brought a special New Year's Li pointed out that the boun• countries. The establishment gift to the Beijing Review. At a dary problem is hindering the of a new international politi• press conference on December improvement of bilateral rela• cal order must be based on the 21 in Beijing, Gandhi con• tions. five principles. firmed that, prior to his depar• The Indian prime minister The creation of such a new ture, his government lifted the agreed that the border dispute political order is tied to the 27-year-long ban on the distri• is the biggest thorn vexing movement to institute a new bution of the Beijing Review. Sino-lndian relations. He said international economic order The ban was an embargo. "It that both sides ought to re• of equality and mutual bene• has been lifted and we wel• move this problem by means of fit. In today's world, the gap come any papers from China," peaceful and friendly consul• between the South and the the Indian leader said. tations. India is resolved to act North is widening, and the While meeting with the on this in a spirit of mutual world economy is seriously un• young Indian leader on the benefit and reciprocity. balanced. The formation of a same day, Deng recalled his Gandhi also said,' while both new international economic tal-ks with Gandhi's grand• sides are seeking a solution to order seems all the more press• father, then the prime minis• the boundary problem, a ing since the world is now in• ter, in 1954 when relations tranquil border atmospheres tertwined and interdependent. were harmonious. Gandhi ex• should be maintained. At the To found a new internation• pressed hope that such a re• same time, the two countries al political and economic or• lationship could be resumed. can increase their exchanges der is to fundamentally reform The last 30 years or so have and co-operation in other international relations. This, seen an estrangement, and fields. undoubtedly, is an arduous even border conflict, between During the talks, Li ex• task that requires steadfast ef• the two countries. Deng told pressed admiration for the In• forts from countries and peo• Gandhi that China and India dian government's principled ples all over the world. should forget the unpleasant position oh the Tibet issue.

BEIJING REVIEW, JANUARY,2fEIS89 Deng meets Gandhi. LJ ZHIYUAN

The Chinese government has through the test of history, The two countries sigried noted, Li said, that all Indian constitute the basic guiding three accords on cultural^ governments have stuck to the priniciples for good relations scientific and technological following positions in this re• between states. These princi• co-operation as well as ciyil gard: Tibet is part of China; ples also constitute the basic aviation, the communipiie India will not interfere in Chi• guidelines for the establish• said. >r. na's internal affairs; nor will ment of a new international Gandhi invited Chinese Pre• it allow Tibetan separatists in political order and a new inter• mier Li Peng to visit India India to conduct political ac• national economic order. Both when convenient and Li ac• tivities aimed at splitting up sides agreed that their com• cepted with pleasure. China. mon desire was to restore, im• Gandhi reiterated that the prove and develop Sino-Indian by Li Haibo Indian government considers good-neighbourly and friendly Tibet an autonomous region of relations on the basis of these China. The Indian government principles. This not only con• 'No' to Taiwah's does not allow any political forms to the fundamental in• forces in India to engage in terests of two peoples, but will Elastic any political activities harm• actively contribute to peace ful to China's internal affairs. and stability in Asia and the Diplomacy A joint press communique, world as a whole. The two he Taiwan authorities, issued by the two governments sides reaffirmed that they T while doing their utrhost on December 23, said that the would make efforts to further to push the so-cailed "elas• five principles of mutual res• their friendly relations. tic diplomacy," are actually pect for sovereignty and terri• The communique said a trying to create "two Chinas" torial integrity, mutual non- joint working group would be or "one China, one Taiwan." aggression, non-interference established to deal with the But they will not succeed, said in each other's internal affairs, boundary question. The two a Chinese Foreign Ministry equality and mutual benefit, sides also agreed to develop ra- spokesman in a statement oh and peaceful co-existence, lations in other fields and to December 19, 1988 in pe;iiiii|. which were jointly initiated by set up a joint group on eco• Some Taiwan authorities: China and India and which nomic relations and trade, as hpe recently 'indicated that have proved full of vitality well as science and technologs'J: t^iCi'Jaiwan authorities wb'^lii

6' I^IJJP REVIEW, JANUARY 2-8, 1989 SiSSIilDSBDSSEIISS pursue the so-called "elastic derstanding reached on the mainland, the dignityu and diplomacy" with redoubled ef• Taiwan question when they es• status of our great mother• forts and have openly stated tablished diplomatic relations land." ' • that they would develop "offi• with China, and their refusal cial relations" with some coun• to establish official relations tries having diplomatic rela• or contacts of an official na• Foreigners tions with the People's Republ• ture with Taiwan," he said. "It ic of China (PRC). is our belief that the Taiwan Watch Arhbng other things, they authorities will not succeed in Satellite would set up the so-called pushing their 'elastic diploma• "commercial office of the Re• cy'." Launching public of China," upgrade He said that the Chinese some unofficial organizations government has consistently hina successfully to "consulates-general," and opposed any attempt to creat launched a telecommun• even establish or restore "di• "two Chinas" oc."one China, C ications satellite on De• plomatic relations" with these one Taiwan" in international cember 22, 1-988 at the countries. organizations. This just and Xichang Satellite-Launching They have also pressed for a clear-cut position has won full Centre in Sichuan Province. return to the international or• understanding and support by The instruments aboard the ganizations in an attempt to governments of other coun• satellite have been operating create "two Chinas" or "one tries. The case of Taiwan being normally. Remote monitoring China, one Taiwan." These allowed to join the Asian De• and control is being conducted moves arouse grave concern, velopment Bank in the name by a monitoring and control the spokesman said. of "Taipei, China" is a kind centre in Xian, Shaanxi Prov• In the statement, he reiterat• of special arrangement and ince. ed that the international com• should not be regarded as a Premier Li Peng and Deputy munity has long recognized model universally applicable Secretary-Generals of the Cen• that the government of the to other intergovernmental tral Military Commission People's Republic of China is and international organiza- Hong Xuezhi and Liu Huaqing the sole legal government re• • tions; the spokesman added. were on the scene when the sa• presenting all of China and He pointed out that the Tai• tellite was launched. On be• that Taiwan is an inalienable wan authorities, while doing half of the Chinese Commun• part of the Chinese territory. their utmost to push the so- ist Party Central Committee, In international relations, called "elastic diplomacy," are the State Council and the Cen• thp Chinese government has actually trying to create "two tral Military Commission, Li persistently stood for the de• Chinas" or "one China, one extended congratulations to velopment of friendly rela• Taiwan." It not only runs the people involved in the sa• tions and co-operation with all counter to their repeatedly tellite's development, produc• other countries on the basis of claimed postion of "only one tion and launching. the Five Principles of Peaceful China," but also goes against Also present at the scene Co-existance. It has opposed the aspirations of all Chinese, were representatives from gov• the establishrnent of. official both at home and abroad, who ernment departments or com• ties and contacts with Taiwan are concerned about China's panies of the United States, by countries having diplomat• reunification. France, Federal Germany, ic'relations with the PRC, the "We hope that the Taiwan Pakistan, Iran, Australia, Bra• spokesman said. "We have authorities will get a clear un• zil and Hong Kong. It is the never taken objection to their derstanding of the situation first time that the centre has economic, trade and cultural and, bearing in mind the over• allowed foreign observers to exchanges of an entirely unof• all interests of the Chinese na• witn^s the whole process of ficial nature." tion, stop activities detrimen• satellite launching. China is further developing tal to China's reunification in The satellite, the same mo• and deepening its friendly re• line with the trend of the times del as the telecommunications lations with other countries. and popular will, and join us satellite which was launched "We deeply appreciate the ef• in the endeavour for the peace• on March 7, 1988, was sent forts of the overwhelming ma• ful reunification of China," he into orbit by a Long March jority of countries to strictly s^id. "Only by doing so, can Isfq, 3 carrier rocket. • abide by the agreements or un• Taiwan enjoy, along with the

BEIJING REVIEW, JANUARY 7 E|VENjTSi/'TRENp

cent of the total number of percent of the state-owned en• Reforms Crack workers in the state-owned en• terprises, total wages are al• terprises. ready coupled with the econo• 'Iron Ric^e Bowl' In their attempts to invigo• mic benefits. These units have rate the lethargic lifetime em• some say-so in the dealing of eforms in China's labour, ployment system, more than wages, and various avenues wage and insurance sys• 26,000 state-owned enterprises are being explored, including tems have brought about have reorganized their labour floating wages and pieccTrate Rnew look in its enterprise man• force of 9.6 million permanent wages. agement system and boosted workers. Surplus labour will .Now, he said overall social the develoRijjent of the social• now be trimmed by rigorous planning for retirement pen• ist commodity economy. La• competition. sions has been realized in more bour Minister Luo Gan told than 2,000 cities and counties a national conference attend• T)iese achipvements, the- throughout the country. And ed by directors of local labour thiAislerikid.'/'reflect the fact the establishment of regular departments and bureaus from that CjEiijgt made an impor• unemployment insurance and across the country. tant "breafcthrbugh in the re-^ forrti of its employment system pension systems is afoot for Addressing the opening cer• and has shaken the tradition those contracted workers new• emony of the conference on of lifetime employment, called ly employed. December 9, 1988, Luo said the 'iron rice bowl'." However, Luo pointed out, that in the past 10 years 70 there is still a snarl of unfin• million people have entered When talking about shaping ished business. For instance, the urban work force. In the up wage'distribution, Luo Said he said, the labour market sys• past two years, state-owned en• that all enterprises have de• tem is still imperfect, the com• terprises have employed 8.05 cided to link workers' bonus• petitive employment system is million workers under con• es with their businesses' profit• incomplete yet, and the struc- tract, accounting jfor 8.3 per• ability. Meanwhile, in 26.4 China's Top 10 News Events in 1988 Editors-in-phief of 11 Chinese national newspapers have reached agreements in most cases in selecting China's top 10 news events in 1988. The top 10 news events are as follows, listed in order of the number of votes: • The Third Plenary Session of the 13th Chinese Communist Party (CPC) Central Committee, which approved the guidelines for improving the country's economy, straightening out the economic order and deepening the nationwide reform; • The first annual sesion of the Seventh National People's Congress (NPC), at which Yang Shangkun was elected China's president and Li Peng was picked as premier; ••The wreck of a Kunming-Shanghai express train on January 24, which killed 88 people and led to the resignation of minister of railways Ding Guangen, • Death of Chiang Ching-Kuo, chairman of the Chinese Kuomintang (KMT), for whom General .Secretary Zhao Ziyang of the CPC Central Committee expressed condolences and the CPC Central Committee sent a message of condolence; • The successful testing of Beijing's electron-positron collider on October 19; • First visit by Chinese foreign minister to the Soviet Union in 31 years and possible Sino-Soviet summit in the first half of 1989; • Most serious inflation since the founding of New China in 1949; • First visit by an Idian'^rime minister to China in 34 years; • Formulation of strategy for economic development in China's coastal areas, which aims to develop an export-oriented economy, • Hainan Island officially becoming China's 31st province. The ir national newspapers surveyed were: Renmin Ribao, China Daily, Guangming Daily, Economic Daily, Economic Information, Liberation Army Daily, The Journal of The People's Political'Gonsultative Conference, Workers' Daily, Farmers' Daily, China Youth News, and Chinese Wotnen News. lot ' -"'"ri 1 h' ^ ^—

B^IIJSG REVIEW, JANUARY 2-8, 1989 ZHENG ZHENSUN Xinjiang Railway Under Construction racks are to be laid for the northern Xinjiang Railway from Urumqi, Xinjiang, China, to T Alataw Shankou, a point at the Sino-Soviet border. The entire length will be 460 kilometres, of which 269 kiloinetres have been laid. This is part of the world famous great project "Eurasian Continent Bridge," which will be completed soon. The "Eurasian Continental Bridge" is an international railway artery, connecting the Pacific and the Atlantic. When it is finished, large amounts of Chinese, Japanese, Southeast Asian, Hong Kong and Macao goods will be transported from the port city Lianyungang in eastern China to the Black Sea, the Baltic Sea, the Mediterranean Sea and the harbours along the Atlantic coast, through the hinterland of the Eurasian continent. It will save 20 percent on transportation expenses and the transportation time will be half that of sea shipping (via the Indian Ocean and the Suez Canal). Presently, the section between Urumqi and Usu has been opened to traffic. The track is expected to be laid to Alataw Shankou in 1990 and will be opened to traffic officially in 1991. Then, the ancient Silk Road will have become a modern railway.

ture of employment is not al• in some selected cities. This, be further developed, he said, ways reasonable. A regular would be a major turnabout "Labour departments at all and proportionate wage- from the traditional practice levels should study the new si• increase system is yet to be es• of life-long employment. tuation and render better ser• tablished, he added, and egal- Luo said that the ranks of vice in this regard." itarianism in the distribution employees in state-owned en• The government is prepared system is still prevalent. terprises will be thinned out in to expand the scope of unem• "These problems, which ob• 1989 through cutting down the ployment insurance, he said, struct the establishment of capital investment scale, clos• which is now limited to such normal economic environment ing or merging a number of groups as contracted workers and order, should be resolved enterprises and readjusting the and those from bankrupt en• through further reforms," Luo industrial structure.' terprises or enterprises going, added. China will face a serious bankrupt. The minister unwrapped a unemployment problem in the Luo said enterprises cannot new measure, which beginning coming years, he warned. It is be expected to shoulder the ert- this year will allow enterprise advisable for the unemployed tire burden of dealing with la• directors to dismiss workers to organize and ferret out jobs bour surpluses brought on by> and workers to resign for other for themselves, and individual regrouping or adopting a la-> jobs on an experimental basisi; And private economies should; hour Rontrart system, iO„-l01-,

BEIJING REVIEW, JANUARY l-'SJimS. 9 prove efficiency and produc• Weekly Chronicle ECONOMIC tivity. The options open to en• terprises include transferring (December 19-24) December 20 the surplus workers to new • The Ministry of Foreign economic entities or training POLITICAL Economic Relations and Trade them for new jobs. has recently decided to ban ex• The labour reform will trun• December 21 ports of six commodities next dle ahead despite the difficul• • At the meeting with Phao year. ties, according to the minister. Bounnaphol, minister of econ• Effective as of January 1, Regrouping will be popular• omy and trade of Laos in 1989, the banned exports in• ized nationwide this year in Beijing.Chinese Vice Premier clude copper, and copper- places where conditions per• Yao Yilin expresses his heart• based alloys, aluminum and mit. felt gladness over the restora• aluminum-based alloys, nickel In his speech, the minister tion of economic and trade re• and nickel-based alloys, nickel also dealt with the general lations between China and products, platinum and yellow principles guiding the reform Laos. phosphorus. of the wage system. Wage He says: "The important hikes for business employees thing is not the volume of December 21 will depend on productivity trade but the restoration of bi• He also says that an organiz• and economic returns. This lateral economic and trade ties ing committee for the WTCA principle will see action in after a period of suspension." annual meeting has been set up 1989 in state-owned enterpris• He also expresses conviction with Vice Premier Tian Jiyun es, which could affect 70 per• that such relations will expand as its honorary chairman and cent of the nation's workforce. in future. Beijing Mayor Chen Xitong as Wage increases for those in n Commenting on a recent chairman. government organizations and news report from Taiwan that • The' Datong Locomotive institutions will depend on the the Kuomintang(KMT) au• Plant in Shanxi Province, the general level of social econo• thorities will give up: the largest of its kind in the coun• mic development. "three nos" only under certain try, turns out its last steam lo• At the same time, controls conditions and that the Revo• comotive today, marking the on wages and individual in• lutionary Committee of the end of the country's 107 histo• comes should be improved and Chinese Kuomintang(RCCK) ry of steam engine production. supervision of wages streng• must be returned to the Cen• The 31-year-oId plant is ex• thened, he said. tral Committee of the KMT pected to shift its production Luo said pension reform in Taibei, a spokesman for the to diesel and electric engines. in enterprises will mean that RCCK says that this is not a funds should rely on a transfu• matter of 'return', but one 're• CULTURAL sion of payments shared by the cognition.' The RCCK will not state, enterprises and workers 'return' to the KMT in Tai• December 19 themselves. Pilot projects in wan. • Once being classified as con• this area will be conducted in fidential, a series of five docu• some cities this year. December 22 mentary films on the nuclear Retired workers now enjoy • At a weekly news briefing, tests conducted in China since pensions provided by the state in response to a question 1965 and nuclear protection and enterprises. Their liv• about whether China believes measures will be made public ing standards should not be Viet Nam's claim to have with• soon. dwarfed by inflation. Pension drawn its troops from Kam• Wang Ruifa, the films' prod• reform over the next five years puchea, the Chinese Foreign ucer and a professor at the In• will focus on the establishment Ministry spokesman says that dustrial Health Testing Insti• of a social insurance fund and without strict and effective in• tute under the Ministry of various forms of social insur• ternational supervision, it is Public Health, says that the ance that will reach all of Chi• impossible to confirm whether film's value lies in the fact na's retired workers, Luo said. or not the pull-out is genuine. that they have recorded nu• Luo said the government He says: "We hope that-Viet clear impacts on living things will take measures this year Nam is in fact withdrawing its and possibly will give a clue to and next year to check the flow troops and will do so complete• .pfptection against such dam of rural labour into cities! -p ly and as soon as possible •;agc. •

10 I,»NG REVIEW, JANUARY 2-8, 1989 IIIiJijgQSQfJDgJIilQB Relative Detente Befalls the World byHuanXiang

S-Soviet relations have going a significant alteration. festered have been cooled by begun to ease with the The two superpowers had been the salve of political solutions. U signing of the treaty on eyeing each other warily since This, in turn, has created a elimination of the interme• President Ronald Reagan chain reaction among other diate nuclear forces (INF), came to power. Initially, he "hot spots" and preliminary producing a catalyst for signi• was prepared to match guns agreements are being reached. ficant global changes. Corres• with the Soviets in a race for If the trend continues, the ponding to the detente be• arms and a regional rivalry, world will embark upon a tween the West and the East, which dropped the world into long phase of relative detente, disputes in many "hot spots" a long period of severe tension. which -will probably last at are showing signs of political But relations waxed fairer af• least until the end of this cen• resolution. The never-ending ter Mikhail Gorbachev be• tury. arms race has become less of a came general secretary of the This entire international si• policy obsession with the two Communist Party of the Soviet tuation was initially triggered, superpowers, while a com• Union (CPSU) and announced by a sag in the two superpow• prehensive national strength, his strategies of accelerating ers' economic potency and a which tags much importance domestic development and rise in the development of a to the development of econ• pursuing foreign detente. Af• multipolar pattern in world omy, science and technology, ter the INF treaty was signed, politics. Both superpowers will play centre stage in future the two superpowers agreed to have an urgent need for de• world struggles. Confronta• shake hands rather than to tente in order to improve their tions between social systems continue butting heads. Al• economic status. To this end, and ideologies, though still though antagonism still exists, Gorbachev is promoting his" locked in, are tending to be• dialogues between the two su• new thinking."The United come less fierce and more ob• perpowers, more often and States will also have to get scure. While the world's pol• more systematic, have grad• on the bandwagon with corres• itical pattern is becoming ually strengthened. ponding strategic adjustments. multipolar, the global econo• In the three years since my is going to be divided into 1985, when Gorbachev took different groups. All coun• office, the Soviet Union and Power Redefined tries, especially the big na• the United States have orches• tions, are now shifting gears in trated four summit meetings. Both US domination of the regard to their foreign policies This is unprecedented in the post-war world and the rise of in order to adapt themselves to history of US-Soviet relations. the Soviet Union have been new curves in the world situa• And Soviet Foreign Minister backed by their strong mili• tion. While improving its eco• Eduard Shevardnadze and tary forces. For a long time, nomic environment, adjusting US Secretary of State George the two scrappy powers com• its economic order and deepen• Shultz have had more than 20 peted to establish overseas mil- ing the reform, China also has meetings. Mutual visits by the itay bases and scrambled for to make a sober survey and two countries' defence minis• strategic points. They pumped profound study of the chang• ters have also been realized. up their military budgets and ing world order. To prop up mutual confidence, accelerated the development the Soviet Union even showed of new strategic and space US Defence Secretary Frank weapons. Military confronta• Carlucci some of its secret mil• tion was thus highlighted as A New Period itary facilities during his visit. an important contest in US- US-Soviet relations, which With the relaxing of US- Soviet relations. have been playing frontline Soviet relations, those "hot The rivalry between these in international affairs since spots" where disagreements two leading countries has also World War II, are now under• between the two superpowers given impetus to a situation of

BEIJING REVIEW, JANWA^RY 2-8, 1989 11 OlSiiSSISBQDBlESBiS severe tension where daggers proliferation of nuclear wea• the world and is the biggest have been drawn between the pons will also bring about an international investor. Its for• North Atlantic Treaty Organi• eventual tangle of problems. eign currency reserves rank zation (NATO) and the War• The threat of a new world war first in the world, and the her• saw Pact. still exists, crying out for con• culean Japanese yen is the In the new phase of relative tinued attention to the issue of strongest in world money mar• detente, however, a race disarmament. kets. Due to the fact that Ja• for comprehensive national pan is up and coming, econo• strength will replace the arms mic frictions between it and race as the principal form of Four-Way Race the United States are intensi• international confrontation. fying. This contention will focus Owing to the uneven devel• In recent years the Euro• mainly on economy and tech• opment of the world economy, pean Community's economic nology, but will also include the economic stances of the growth has lagged that of Ja• military, political and cultural United States and the Soviet pan and the United States. factors. Union are losing weight, What's more, there is an im• At present, such a process while those of Western Euro• balance in the development of has begun. All countries are pean countries and Japan, in EC countries. -But the 12 EC tuning up their economic particular, are gaining. Thus, countries have a population of structures, replacing worn-out as the bipolar pattern in which 300 million, and their to• parts and mapping out new the two superpowers dominate tal GNP in 1987 reached roads to economic develop• the world unravels, it will be US$4,200 billion—almost on ment. It may take 10 years for replaced by a multipolar one par with that of the United the world economy to gath• in which the aforementioned States. The EC's trade volume, er enough momentum to over• economic contenders will vie 40 percent of the world's total, come its low growth rate. How• for supremacy. ranks first. ever, by the end of this century From the end of 1982 until In the past decade, the So• a sizeable breakthrough will 1987 the United States main• viet economy has plodded probably be noted in the new tained a steady economic along behind the Western de• technological revolution, and growth, the longest period of veloped countries, and the gap the world will enter anoth• such growth since its post- is widening. Gorbachev's pro• er period of rapid economic World War II boom. However, posed overhaul of the coun• strides. This, in turn, will sure• at the same time, its economy try's economic and political ly lead to a shift of status got bogged down in high finan• structures and his strategy of among the world's big nations. cial and trade deficits, heavy boosting domestic growth have Of course, on the other foreign debts and the devalua• been aimed at invigorating the hand, it should also be noted tion of the US dollar. The US country's economy in order to that the arms race between the empire has declined to a great launch a race of comprehen• two superpowers is still in pro• extent, but its comprehensive sive national strength against gress. With the rapid devel• economic strength still ranks the United States in the next opment and extensive applica• first in the world. century. tion of high technologies, Over a long period of time, Scientific and technological they are cranking up mili• Japan's economic growth rate might will be decisive ele• tary forces of high efficien• has taken off like a kite and is ments in future economic cy, which will be targeted for now the highest among all the bouts between nations. How• use in future warfares. They major powers. In 1950 its gross ever, a country's rank in the are pushing hard to develop national product (GNP) was world's export market will also space weapons and revamp only 3.8 percent of that of the be of ringside significance. At their strategic and convention• United States, but by 1987 it present, the United States and al weapons. At the same time, reached 60 percent in terms of Asia-Pacific region champion new military thinktanks of the US dollars. Because Japan's the world's largest market. big nations are plotting com• population is only half that of In light of these trends, all prehensive reform of military the United States, it surpasses countries ar^ ,plotting a new strategy, organization, com• the latter in its GNP per cap• economic game plan: to spur mand system, weapons rene• ita. the development of new tech• wal and rear supply. The Now Japan enjoys the larg• nologies, to keep score on spread of missiles and possible est amount of trade surplus in world market trends, to field 12 .BEIJING REMtEW,, JANUARY 2-8, 1989 PBliiBBJEIHBPHBlBH more exports, and to parry come the world's vastest mar• tions (ASEAN). keener competition and var• ket. The Soviet Union and the ious protectionist foils. In January 1988, the Unit• East European socialist coun• ed States and Canada signed a tries are also brewing reforms free trade agreement. Starting for COMECON (Council for Grouping Trend this January both sides will Mutual Economic Assistance) cancel tariffs and commodity so that it may adapt to the cur• At a time when the world restrictions on most goods im• rent grouping trend. economy is becoming increas• ported from each other. This In the years hereafter, these ingly internationalized and in• has paved the way for a com• four groups will compete tooth tegrated, more countries and and nail with each other. On regions are segregating them• mon market in North America that will allow a toll-free traf• the one hand, the development selves into regional economic of the world economy objec• groups in order to vie for a ficking of commodities. The United States is just now nego• tively demands networking be• favourable slot in the global tween all countries; while on competition. Grouping has be• tiating with Mexico for a sim• ilar arrangement. the other hand, out of con• come an irreversible trend in sideration for their own in• the development of the world In order to flex its own eco• nomic muscles, Japan is now terests, each group is trying to economy. set up various obstacles. Such gung-ho about extending its EC countries have decided inconsistencies will surely in• force in the Asia-Pacific re• to set up a single European crease economic frictions gion through investments and market by 1992 in order to among the countries and give trade. This is an attempt to practise a free movement of rise to instability in global eco• personnel, commodities, capi• form a so-called East Asian nomic development. tal and labour services. They economic ring led by Japan. have also given the go-ahead The circle is supposed to en• for the opening of a European compass Hong Kong, Taiwan, Asia-Pacific Plays central bank that would uni• Singapore, South Korea and fy their currencies. So West• the members of the Associa• Although Europe will con• ern Europe is targeted to be• tion of Southeast Asian Na• tinue to be the main battle- Top Ten World News Events of 1988 1.0n April 14, an agreement on political resolution of Afghanistan conflict was signed in Geneva. According to the agreement, the Soviet Union will begin to withdraw its troops from Afghanistan on May 15 and finish within nine months. 2. On June 1, leaders of the Soviet Union and the United States exchanged instruments in Moscow ratifying the INF treaty. 3. On August 20, the 8-year Iran-Iraq war formally ceased fire. 4. On October 5, the public vote of Chile vetoed President Augusto Pinochet Ugarte's plan for another eight years in office. • 5. On November 8, George Bush of the Republican Party defeated Michael Dukakis and was elected the next American president. 6. On November 15, the 19th Special Session of the Palestine National Council passed the Independence Declaration, announcing the founding of the State of Palestine. 7. On December 1, Benazir Bhutto was appointed prime minister of Pakistan, the first woman to assume this role in the Islamic World. 8. From December 1-3, for the first time since 1957, a Chinese foreign minister visited the Soviet Union, making preparations for a Sino-Soviet summit. 9. On December 7, Soviet leader Mikhail Gorbachev, during his speech at the United Nations General Assembly session, announced the unilateral reduction of Soviet armed forces by half of a million within two years. 10. On December 13, Angola, Cuba and South Africa, through the mediation of the United States, signed the protocol of the agreement on Angolan peace and Namibian independence in Brazzaville, the capital of the Congo.

BEIJING REVIEW, JANUARY 2-8, 1969 13 DBlOSSEIBQDBlBlBB ground of the struggle for di• Kong and Singapore's strategic markets. In 1987, South Ko• sarmament and any possible positions to establish closer rea's exports peaked at US$46 turbulence in Eastern Europe economic ties with ASEAN billion. Of this, exports to Ja• could muddle East-West rela• countries. Its policy towards pan and the United States tions and the entire interna• China is one of stabilization grew by a walloping 31.9 per• tional scene, global diplomatic and restriction. cent and 55.4 percent respec• and economic power-plays are By vitalizing its economic tively. Taiwan registers a huge cropping up in the Asia- force in the Asia-Pacific re• trade surplus each year, and in Pacific region. Contending na• gion and its economic relations 1987 its foreign exchange re• tions want to get a foothold with Asian countries, especial• serve climbed to US$76 bil• in this area where economic ly Southeast Asian countries, lion, ranking second in the growth has outpaced that of Japan aims gradually to set up world. The per-capita gross na• other regions in the world. and lead an East Asian econo• tional product in Hong Kong Not long ago the Reagan ad• mic circle in preparation for has already reached US$6780, ministration summoned its Se• fui;ther conquests in Australia, and in Singapore, US$6621, cretary of State, George New Zealand and Latin Amer• approaching the level of the Shultz, to woo seven Asia- ica. developed countries. South Pacific nations. This was an Korean President Roh Tae attempt to co-ordinate actions Woo, in his inauguration ad• and policies with these coun• Polarization dress, declared that he would tries and strengthen the US raise his country's per-capita hand at the negotiating table The imbalanced develop• GNP to US$5,000 during his with the Soviets. ment of the global economy presidency. South Korea has Gorbachev courted the re• applies also to the third world. also made it clear that it in• gion with speeches. First, in In 1987, the average total tends to be counted as a devel• 1986 at Haishenwai (Vladivos• growth rate of third world oped country by 1995. tok) he stated the Soviet inten• countries was 3.1 percent, v/ith The economies of Thailand tions in an oration on his Asia- 6.8 percent in Asia, 2.5 percent and Malaysia have also moved Pacific policy. This past Octo• in Latin America and only 1 notably forward, as have those ber in-Siberia he made anoth• percent in Africa. This indi• of Brazil, Mexico and other er important speech, offering cated that the third world is Latin American countries. It a seven-point proposal on the polarizing. Asia is developing can be predicted that by the security of the Asia-Pacific re• more quickly, especially in re• end of the century, a few coun• gion. gard to the "four little dra• tries and regions will be tail- West European countries are gons." In 1987, South Korea's gating the progress of devel• also getting themselves more economic growth rate was 12.2 oped countries , and some may involved in Asia-Pacific pol• percent, Taiwan, 11.04 per• even become developed coun• itical and economic affairs in cent. Hong Kong, 13.6 percent tries as well. order to keep their diplomatic and Singapore, 8.8 percent. Most of the third world profile high. Their speed even far exceed• countries, however, will fall However, Japan's activities ed that of Japan, the fastest still farther behind the devel• in this area are the most out• among the developed coun• oped countries. Confronted standing. Confronted with the tries. For some time to come, with a rapidly-paced world Asia-Pacific region's bullish their economic growth rate, technological revolution, these competition, Japan has had to though likely to drop a little, countries will find themselves readjust its policy. Due to will continue to maintain the handicapped by their low ed• complex relations with the Un• strong momentum of expan• ucational level, technological ited States, however, Japanese sion. backwardness, lack of funds, authorities have had to be cau• These newly industrialized heavy debt burden, and shor• tious in pursuing their aims. Asian countries and regions,^ tage and exodus of talented For some time to come, it especially South Korea and* personnel. Furthermore, many seems that Japan will do its Taiwan, capitalizing on the ap• developing countries will suf• utmost to maintain the status preciation of the Japanese yen fer from the continual drop of quo of US-Japanese relations and Japanese structural trans• primary products' prices and while trying hard to tighten its formation, have greatly boost• the rising price of imports. grip on South Korea and Tai• ed their exports and intruded The plummeting of oil prices, wan and make use of Hong into Japanese and American which started in 1986, has

14 BEIJING REVIEW, JANUARY 2-8, 1989 emptied the pockets of third and regions. foster a strong sense of urgen• world oil producers. As long as It must be realized that New cy and crisis, accelerate econo• a leeching poverty stalks most China has already built a solid mic, political, educational and of the third world countries economic base and social gir• social reforms and bring the and a hoary international eco• ders of a high scientific and economy to a path of steady nomic order toddles on, inter• technologicaT level since its development after a brief per• national reltions will remain founding in 1949. China has iod of rectification and im• unstable. accumulated precious experi• provement. At the same time, As a developing socialist ences, both positive and nega• education, science and tech• country, how will China fare tive, and in recent years the nology must be thrust to the in the flux of a divided third economy has been steadily forefront so that China can oc• world? This is a question that clipping ahead. So, compared cupy an advantageous position draws deep concern. I think with other third world coun• in the fierce international eco• China is now in limbo some• tries, we have a better foot• nomic competition and a foun• where between the two poles ing. It is entirely possible that dation can be laid for a fore• of third world development. If China will realize its goal seeable drastic expansion of successful, China's economy of an economic take-off and China's economy in the next may take off and narrow the quadrupled GNP by the close century. distance with developed coun• of this century. On the oth• tries at the end of the 1990s; if er hand, the other possibil• unsuccessful, China will drag ity does exist. farther behind developed We must have a clear under• (This is a translation of the countries and even trail the standing of the international article published in World newly industrialized countries environment facing China, Outlook No.21, 1988)

NEWS ANALYSIS A Mideast Peace Breakthrough

StraighttalksbetweentheUnited statesand the PLObreaksthe icein the long-stalled Middle East peace process. he first round of US-PLO logue between the United naled by President Ronald Re• T talks, a 90-minute ex• States and the PLO marks a agan to announce a Washing• change of views on the Mi• breakthrough in a long-stalled ton go-ahead for holding sub• deast issue hosted by the Tun• Middle East peace process. stantial talks with the PLO. isian government, ended in The first crack of progress The decision indicated that Carthage on December 16 last came on December 14 last the United States, which had year. The heads of the two de• year, when PLO Chairman always turned a cold shoulder legations—Robert Pelletreau, Yasser Arafat declared again to the idea of negotiating with US ambassador to Tunisia, at a press conference in Gene• the PLO, now has warmed up and Yasser Abd Rabbou, the va that the PLO accepted UN to a new Middle East policy Palestine Liberation Organiza• Security Council Resolutions that acknowledges the PLO. tion (PLO)'s executive mem• 242 and 338 on the Palestine However, Shultz stressed that ber—told the press that their issue, recognized Israel's right the decision to talk did not dialogue was "practical, frank to exist and renounced terror• mean the recognition of the and serious." They agreed to ism in any form. An hour after Palestinian state by the United meet again in a few weeks. Arafat's speech, US Secretary States. The opening of direct dia• of State George Shultz was sig• Not long before this change

BEIJING REVIEW, JA,I^jUARY 2-8, 1989 15 OlilDSISISQQDBIiilQI of heart, the US government, Israel and the United States struggle so as to promote dia• following its consistant policy voting against and Britain abs• logue in a more flexible atti• of no contact, no negotiation taining. tude. Last November, the PNC and no recognition of the PLO, Faced with the United announced the acceptance of had refused to grant Arafat a States' mulish attitude, the As• UN Security Council Resolu• visa, his ticket to attend the sembly decided unprecedent- tions 242 and 338, thus indi• UN General Assembly's de• edly to move the venue of the rectly recognizing Israel, and bates on the Palestinian issue special commission on the Pa• also condemned terrorism. Ar• in New York. lestine issue from New York to afat footnoted the PLO's stand So what impelled the Unit• Geneva, with 154 votes for and many times thereafter. After ed States' abrupt about-face in two votes against (again, the meeting with a US Jewish de• policy? US and Israel), to let the world legation, he endorsed a state• Political observers see three hear Arafat's "voice of peace." ment on December 7 last year influential factors. First of all, The two votes, a scrawny in Sweden. This act clearly ac• the US attitude warmed up opposition, made the United centuated his acceptance of Is• in response to the exceptional States look isolated and discre• rael's right to exist and his heat put on it by world opi• dited. If the United States had denunciation of terrorism. nion. insisted on its stand, it would Arafat, unfazed by the frost• Peace-lovers worldwide have certainly have been attacked bite of US diplomacy, adopted voiced their support for the by Arab countries, blamed by a comparatively milder, rea• decisions made by the Pales• its West European allies, and sonable and agreeable stand in tine National Council (PNC) may have killed the initiative Geneva. On December 13, he on November 15 last year to for a Mideast peace process. presented a three-point peace proclaim the Palestinian state Weighing the situation, it had initiative on the Palestinian is• and accept UN Resolutions no alternative but to alter its sue to the UN General Assem• 242 and 338, and they were policy towards the PLO. bly. The peace proposal calls inflamed by the US refusal to Second, the PLO's candid for the convening of a prepar• allow Arafat to speak at the peace-seeking efforts left the atory committee for an inter• UN Assembly. United States no room to pers• national Mideast peace con• The legal committee of the ist in its original policy. In re• ference, supervised by the UN UN General Assembly voted cent years, the PLO has made Secretary-General. It beckons 121-2 in favour of the resolu• major strategical adjustments for actions to place the occu• tion asking the United States in accordance with the evolv• pied Palestinian territories un• to grant Arafat a visa, with ing demands of situation and der temporary UN supervision

PLO Chairman Yasser Arafat greeting representatives at the 43th UN General Assembly session. and for international forces to be deployed there to protect the Palestinian people and to supervise the withdrawal of Is• raeli forces. The initiative also provides for the PLO to seek a comprehensive settlement among the parties concerned in the Arab-Israeli conflict, in• cluding the state of Palestine, Israel and other neighbours, within the framework of the international peace conference on the basis of the UN Resolu• tions 242 and 338. The US State Department's lukewarm rebuttal on Decem• ber 13 said the speech con• tained some "interesting and positive developments," but "continued to be ambiguous on key issues." These airy areas included the recognition of Israel, acceptance of UN us ambassador to Tunisia Robert Pelletreau (right) shaking hands with Abdullah Resolutions 242 and 338 and Hourani, PNC member. the renunciation of terrorism. According to the US at that Geneva after the US refused to ing of an international peace time, the proposal also failed grant a visa to Arafat. He shut• conference on the Middle to meet their three conditions tled between Arab capitals and East. The resolution said that for opening a dialogue. was constantly on the phone the conference should be based To counteract the US accu• with Arab leaders discussing on UN Security Council Reso• sation that his UN speech was the latest developments arising lutions 242 and 338 and the "ambiguous," Arafat held a from diplomatic slap of the legitimate national rights of press conference in Geneva to US. Hussein also visited Bri• the Palestinian people, pri• elaborate on the PLO's peace tain and France to attest to the marily the right of self- proposal. At that point, the PLO's sincerity in seeking a determination. PLO had met Washington's Middle East peace. His ef• Events since the founding three preconditions for nego• forts helped summon world• of the Palestinian state have tiations, and the United States wide support for the Palestini• brought new hopes to the Mi• was standing on a thin ice of an cause. deast peace process. The state resistance. A just cause enjoys abun• of Palestine has now been re• But the most compelling rea• dant support while an unjust cognized by more than 70 son for the US to change its cause finds little support. On countries, and the calls for an frigid stance is the warm sup• December 15, the UN General international peace conference port the PLO has received Assembly adopted a resolution to resolve Mideast problem are from all peace-loving coun• recognizing the newly pro• reaching a crescendo. It ap• tries of the world, and the claimed state of Palestine as a pears that there is more Arab countries in particular. UN observer. It also decid• bounce and less crackle in re• Diplomatic overtures by ed that the designation "Pa• lations between the United King Hussein of Jordan were lestine" will be used in place of States and the PLO nowadays. obviously a key in co• the designation "Palestine Lib• This atmosphere, in turn, is ordinating the Arab countries' eration Organization" in the likely to clear a path for a less position on the Palestinian is• UN system. frosty Mideast diplomacy dur• sue. It was he who took the Rounding out its annual de• ing the next US administration initiative in proposing that the bate on the Palestine issue, the of George Bush. special session of the UN Ge• Assembly also adopted a reso• neral Assembly be shifted to lution calling for the conven• by Chen Ruwei, Fu Weijian

17 ECONOMIC REFORM A Sweet and Sour Decade More than ten years have now elapsed since China embarked on its programe of reform in 1978. Although the gains have been prodigious, last year a series of problems came to a head, culminating most visibly in spiralling inflation. Liu Guoguang, vice-president of the Chinese Academy of Social Sciences, critically examines the last decade and then offers his assessment on three possible ways forward. by Liu Guoguan

decade has passed since culation, income distribution, China began reforming economic planning, financing, A its economic structure taxation, pricing, labour and towards the end of 1978. Ge• wages, commerce, material nerally speaking, this period supply and foreign trade. As can be divided into three reform of the economic struc• stages: ture forged ahead, reforms in First, from the Third Plen• scientific research and educa• ary Session of the 11th Party tion began. Central Committee in Decem• Third stage runs from Octo• ber 1978 to the Third Plenary ber 1987 to the present day. Session of the 12th Party Cen• Surveying the previous nine tral Committee in October years, the CPC's 13th National 1984. During this period, the Congress put forward the theo• countryside was the focus of Liu Guoguang. CHEN ZONGLIE ry that China stands at the reform. The combination of primary stage of socialism and government administration added reform of the political and commune management in structure to the agenda. Thus the people's communes was China has entered a period of restructured and the family- comprehensive reform involv• based contract responsibility J-^ conomically, the last ing all areas of the politics, system linking output with re• decade has witnessed the economics and culture. muneration replaced the prod• uction team-based collective most dynamic and rapid management, organized la• growth since New China Structural Changes bour and unified distribution. was founded in 1949, Ten years of economic re• At the same time, some exper• form have changed China's imental reforms expanding while living standards economic structure in the fol• enterprises' decision-making have risen faster than lowing ways: powers were conducted in the Enterprises have acquired cities. ever before. But many new strength and vitality Second, from October 1984 problems have also through the expansion of forms to the CPC's 13th National occurred in China^s of ownership, the possession of Congress in October 1987. greater decision-making pow• During this stage, the focus of economic life, such as ers and the right to retain a reform was switched to the ci• inflation, unfair income greater share of their profits. ties. While continuing the re• ThQ,., stjite-owned sector's form measures initiated in the distribution and a drop in share of total industrial out• first stage, a series of initial social morals. put value has dropped consi• reforms and experiments were derably over the 1978-87 per• introduced in production, cir- iod—from 80.8 percent to 69.7

18 BEIJING R-tKlEW, JANUARY 2-8, 1989 percent. It has been pushed In the past decade, the By opening, I mean both aside by the growth of the col• number of industrial products China's relations with the rest lective sector—from 19.2 per• planned and managed directly of the world and relations be• cent to 27.1 percent—and the by the state dropped from 120 tween different parts of China. arrival of the private sector to 60, and the number of ma• With government administra• (including Sino-foreign joint terials subject to unified dis• tion and enterprise manage- ventures and exclusively tribution from 256 to 26. Be• Oient fully integrated until foreign-owned enterprises) cause the proportion of the to• 1978, all central and local gov• which has grown from almost tal national income at the ernment departments strove to zero to 2.4 percent. state's disposal had decreased, create all-embracing systems Within the state sector, the the percentage of investment within their sphere of jurisdic• separation of ownership and in economic construction han• tion. managerial power and experi• dled through the state budg• With the programme, ways ments with contractiiig, leas• et has dropped dramatically: have been explored to separ• ing and joint-stock systems from 76.6 percent to 31.6. Cor• ate government administra• have invigorated enterprises respondingly, the amount de• tion from enterprise manage• and made them increasingly rived from bank credit has ment and to break regional accountable to the market in• jumped from 23.4 percent to compartmentalization to de• stead of administrative depart• 68.4 percent. The role of eco• velop effective horizontal eco• ments. nomic levers such as pricing nomic co-operation. China The expansion of enterprises' and taxation has been greatly now has 49 trans-provincial decision-making powers and strengthened in the regulation economic agglomerations. At the decrease in the number of social supply and demand, the same time, several enter• of commodities subject to the creating the conditions for prise groups have been esta• state's mandatory planning and a gradual shift from direct blished uniting different local• unified prices have steadily in• macro-economic control to in• ities, trades, and even forms of creased the role of market me• direct regulation. ownership for the production chanisms. In economic exchanges with and marketing of famous During the last decade, the other countries, the implemen• products. markets for farm and sideline tation of the open policy has China has taken several products and consumer goods freed China's economy. large strides in opening to the have initially taken shape, the markets for capital goods and The Xiamen Engineering Machine-Building Plant has raised its annual output of short-term funds have devel• heavy-duty tractors from 250 to 1,G00, exporting all of them to the United oped steadily, and the mar• States. Ll KAirUAN kets for technology, informa• tion, labour services, long- term funds and real estate have begun to emerge. Now, around 65 percent of all farm and sideline products, 55 percent of all consumer goods and 40 percent of all in• dustrial materials have their prices determined by the mar• ket to varying degrees. This embraces around half of all commodities on sale in China. Accompanying the expansion of enterprises' decision-making powers and the formation of various markets, the govern• ment has been steadily replac• ing direct control of enter• prises with, indirect regula• tion through the market. BEIJING REVIEW, JANHAHY 2-8, 1988 19 outside world. The first was in China's economic develop• the emergence of inflation. 1980 when the central govern• ment, as can be seen in the Following the over-rapid eco• ment granted Guangdong and quadrupling of total foreign nomic growth of 1984, price Fujian provinces the power to trade—from US$20.6 billion rose at an average annual rate introduce special policies and in 1978 to US$82.7 billion in of 7.3 percent for the previous flexible measures to attract 1987. three years. Then in the first foreign involvement in Chi• half of 1988 they jumped 13 na's economy. The second was percent. the establishemnt of four spe• Problems Surface The second is unfair income cial economic zones at Shen• distribution. Income gaps be• zhen, Zhuhai, Shantou and The changes in China's eco• tween different trades or occu• Xiamen in 1980 and 1981. The nomic structure have had a pations have widened unrea• third was the decision to sonably, in particular open 14 coastal cities and with factory workers far the entire island of Hain• outstripping government an in 1984. employees. It is often said The fourth was the cen• that "a surgeon makes tral government's deci• less than a barber" and sion in 1985 to open the "a university professor Changjiang (Yangtze) earns less than a hotel River Delta, the Zhu- waiter." But it should jiang (Pearl) River Del• be remembered that for ta and the Xiamen- most Chinese, income Zhangzhou-Quanzhou gaps have not been rea• triangle in southern Fu• sonably widened, with ev• jian. The fifth was the eryone earning an equal phased opening of Shan• share regardless of their dong and Liaodong pen• individual proformance. insulas from 1986. And The third problem has the sixth was the deci• been the increase in prof• sions taken in spring this iteering, corruption, bri• year to make Hainan Is• bery and abuse of power land a province and the for personal gain, which largest open special eco• have contributed to a nomic zone, to introd• drop in social morals ac• uce further experimental ross China. open zones in Guang• U XlNbHENG All these problems are dong, Fujian and Jiangsu Jianou County in northern Fujian earns 25 million yuan in foreign exchange a year by exporting bam• inevitable at this early provinces, and to de• boo goods. stage of reform when the fine an economic devel• market, legal system and opment programme for the powerful impact on the coun• institutional rules leave much coastal areas. try's economic development. to be desired and the new so• In consequence, China has a GNP, state revenue and aver• cialist commodity economic vast open belt along its coast age per-capita income have all order remains to be fully esta• embracing more than 100 mil• more than doubled. Economi• blished. Only with continued lion people, which will grad• cally, the last decade has wit• reform can these problems be ually expand inland. By the nessed the most dynamic and overcome. end of 1987, China had ap• rapid growth since New China 1. Establishing a sound eco• proved 9,973 foreign-funded was founded in 1949, while liv• nomic environment. In the first enterprises, of which 4,300 ing standards have risen faster few years of reform, Chinese have begun operation and 80 than ever before. economists shared the view percent are in the coastal .Of course, many probkms that reforms entailed a com• areas. ' • . - have also qG|u|red in China's paratively free economic en• The policy of opening to the economic lif|, of which three vironment. In other words, a outside world has played an in particular have caused limited buyers' market where increasingly important role in much discussion. The first is total social supply slightly sur-

20 BEIJING RM*BW, JANUARY 2-8, 1989 mm passed total social demand. The readjustment of the in• of thorny problems. For exam• The aim was to increase enter- terest relations between differ• ple, with neither the old man• prises'sense of the need for re• ent social sectors would re• datory system nor the new form and enable competitive quire the economy to advance market system effectively mechanisms to play their due with a large overall momen• dominating the distribution of role and to ensure the provi• tum. resources, the defects of both sion of solid financial and ma• So these people were op• systems have been magnified. terial reserves. In the light of posed to a deliberate cutback Confusion has arisen in prod• this view, the relation between in investment and consump• uction, circulation and man• economic readjustment and re• tion, on the ground that a pol• agement, creating much lee• form was properly handled icy of containment would not way for speculation and rack• in the early 1980s, promoting tally with China's goal of re• eteering. This has led many economic development. form and economic develop• Chinese and foreign econo• However, the rapid growth ment. mists to suggest putting an ear• in 1984 caused an alternative This argument, however,- ly end to the coexistence of the view to emerge. It was argued leaves the problem of the eco• two systems and establishing that a free economic environ• nomic environment unsettled the dominant position of the ment could not be the prere• both in theory and in practice. new system as soon as possible. quisite for, but could only be However, such a transforma• Instead, it has become con• tion is no easy job. It is res• the result of reform. Because, fused with the worsening in• tricted by many factors, sub• they argued, shortages were flation and has continued to be jective and objective, but the the inherent characteristics of a controversial issue. major probloem is maintain• the old system, reform could 2. The friction between the ing balance in the macro- be conducted only when sup• old and the new systems. For economy. So long as social de• ply fell far short of demand several reasons, China has pro• mand far exceeds social supply and any structural factor ge• ceeded with economic reform and inflationary price hikes nerating the shortages should in a piecemeal fashion, so at remain unchecked, it is diffi• be eliminated through reform. present the old and new sys• cult to remove the fetters Because of this, some econo• tems co-exist alongside each caused by the co-exitence of mists held that since China's other. The aim of introducing the two systems. growth and structural trans• reforms gradually was to avoid It appears that this situation formation were already pro• massive social and economic will have to continue for some ceeding rapidly, the rapid upheaval. However, this time until the new system be• growth of both investment and blending of two systems has comes strong enough to stand consumption was unavoidable. undoubtedly generated a series on its own feet. The actual

More than 1,000 Sichuanese pedlars conduct daily transactions worth 100,000 duration of this period will be yuan at a rabbit hair market they opened themselves. determined by how rapidly in• LIUQIANCANG flation can be curbed and the present sellers' market be con• verted to a limited buyers' market. 3. Should the reforms be dee• pened by stimulating interests or changing economic mechan• isms? Without doubt, econo• mic reform is aimed at stimu• lating people's enthusiasm for production through adjust• ment of relations of interest. But of more importance is uprooting the old production and (distribution system which cannot meet the requirements" for development of the pri• mary stage of socialism. In the countryside, these two

B'^IJING REVF^, JAIS^'Jt^j(2-8, 1989j 21 smsa methods were combined. The property relations. reform, the problem of price establishment of the house• 4. The tactic for future re• distortion and rigidity has be• hold responsibility system in forms. The next two targets of come further complicated by place of the people's com• China's reform programme are being entangled with the munes represented a change in reform of property rights in "double-track" system of mechanism. But simultaneous• enterprises and price reform. state-set and market prices and ly it replaced the egalitarian 'Which is more irnportant? the continued all-round rise in and collective basis of the na• This is a controversial is• prices. The difficulty in adv• tural economy with a competi• sue, in which two antithetical ancing lies in the fact that tive commodity system where views are held in economic cir• price reform itself causes farmers become responsible cles. The first stresses the re• prices to rise, and if other in• for their own profits and loss• form of enterprise ownership, flationary pressures are left es., Readjusting relations of in• arguing that enlivening prod• unchecked, then the two will terests by way of changing the uction is the overall goal of promote each other in a vi• conomic structure has proved reform:if enterprises are not cious circle. Therefore, to ac• successful in the first-round of re-organized, then it would celerate price reform, it is par• rural reform. prove hard for market me• ticularly necessary to curb in• Unlike the countryside, chanisms and indirect macro- flation and devise measures however, reform of the urban economic control to operate. for price reform, particularly economy has hitherto been The second places the emphas• wage reform. In this way, conducted mainly by the sti• is on prices, claiming that if China will tibe over the dif• mulation of interests rather they remain distorted, then the ficulties of price reform,and than through major restruc• market must also remain im- will have established a new turing. For example, the re• complete and clogged. It economic system. form of state-owned enterpris• would therefore be impossible es has reduced their tax bur• to make enterprises run inde• dens and allowed them to re• pendently and be responsible Future Possibilities tain a greater share of their for their own profits and profits. However, almost no losses. Not long ago, Chinese econ• fundamental changes have Both of these views appear omists had a heated discus• been made in their manage• logical, but their , respective sion on China's short-term ment structures and property weaknesses centre on the ex• (1988-90) and intermediate- relations. In consequence, en• cessive stress on one aspect at term (1988-95) reform pro• terprises are not run as inde• the expense of the other. As a gramme. As different groups pendent entities responsible matter of fact, the relation be• perceive the present economic for their own interests, while a tween these two aspects of re• situation in strongly contrast• lot of money has been paid out form and their roles in the ing ways, several different in bonuses and wage increases entire economic reform was ideas for future reform were as wage mechanisms remain clearly described in the deci• proposed. almost unchanged. sion taken by the 12th Party Some held that although In short, the undue stress on Central Committee at its third great achievements have been stimulation of interests has not plenary session in 1984 that made in economic reform, the only made no difference in the enterprise refonn was the core present economic situation, state-enterprise relations of in• of economic reform and price beset with inflation, a con• terests, but has put enterprises reform was the key to the re• fused economic order,unfair in the position of demanding forms as a whole. Reforms in income distribution and sev• more from the state while con• these two fields, an integral ere corruption, is bleak. Un• tributing less. Such reform has part of the economic reforms der such circumstances, they made enterprises shortsighted as a whole, are interrelated. argued, it would prove dif• in production and manage• The former is aimed at creat• ficult, if not impossible, to ment, caused a surge in de• ing doers of market activities, adopt measures of great conse• mand and destabilized the while the later is aimed at es• quence for economic reform, economy. tablishing a competitive mar• especially price reform. There• China is now probing new ket environment. Reforms in fore, it is preferable to exercise ways to restructure enterprises these two fields should be car• strict macro-economic control by separating ownership from ried out in close co-ordination. by administrative means. management and clarifying After ten years of economic With the economic environ-

22 BEIJING.RE.yiEW, JANUARY 2-8, 1989 ment harnessed, they claimed, the prices of capital goods should first be readjusted and then opened to market forces, followed by decontrolling the prices of most products. If price reform was supported with financial, taxation and monetary reform, a series of sound parameters and equal opportunities for market com• petition could be created. Si• multaneously, reforms could be steadily carried out in the state-owned enterprises and other fields. This proposal calls for the co-ordination of reforms ac• ross several fields. If it were 5H1 PANQI feasible, all the problems aris• The Qingdao No. 4 Knitwear Mill produces export goods on imported equipment. ing from the collision of the old and new systems would be solved by properly subsidizing problem confronting China's eliminated and the new system urban dwellers. economic development lies not would exert its effective role These people oppose econo• in the mounting demand but in within a reasonably short per• mic retrenchment. They pre• insufficiency of supply. There• iod of time. However, its scale fer continued growth at high fore, a policy of slight infla• and speed of upheaval would speed, or as ihey say, "making tion should be adopted to ac• carry with it a large number of the cake bigger to ensure ever• celerate economic reform and severe risks. It is widely feared yone has a slice." Stabilizing development. This view, the that too much economic re• the economy, they argue, can most influential in economic trenchment, as these people only be realized by deepening circles, has been repeatedly af• advocated, would lead to eco• reform. In the coming two or firmed in the variotis econo• nomic deflation. It is also not three years, the focus should mic fluctuations which have certain whether a free econo• be restructuring enterprise occurred since the end of 1984. mic environment would neces• management by developing However, advocating a com• sarily emerge as the final out• the contract responsibility sys• bined acceleration of reform come. tem. At the same time, reforms and development seems un• Others disagree with the as• should be carried out in the likely to provide a solution to sessment that the present eco• fields of investment, the sup• the problem of worsening in• nomic situation is bleak.After ply of materials, foreign ex• flation. If reforms were car• almost ten years of economic change management, finance, ried out along these lines, it reform, they argued, China's taxation, and property. With would be impossible to create economy has been greatly improved enterprise efficien• an economic environment fa• strengthened and grown far cy,increased social supply vourable for the supporting re• more dynamic. The present and stronger macro-economic forms centred around prices. economic situation, though maanagement, price reform If the confusion wrought by not as good as it should be, is could be conducted in the en• the collision of the two systems taking a turn for the better.- suing years to further improve continued, the outcome could Last year's industrial growth the economic environment for only be bad for China's future rate of 14.6 percent was nor• enterprises. The proponents of economic reforms and devel• mal and healthy, if a bit on this view estimate that the new opment. the high side. The 17.2 percent system occupy the dominant The assessment of the pre• growth rate in the first half of position in around eight years, sent economic situation mady this year likewise is a sign of and then would be further con• by the third group of econo• vigour. The principal factor solidated and improved. mists is similar to that of the destablizing the economy is This argument is rooted in firtst group. They differ, how• price increases, which can be the belief that the principal ever, in preferring measures

BEIJING REVIEW, JANUARY 1-8, 1989 23 mm aimed at stabilizing the econo• eliminated. The country could were aimed at putting the my to push reform ahead while then move on to a second stage stress of reforms and construc• simultaneously using well- for 1991-95, during which tion in the coming two years devised reforms to promote "rapid" reforms of great con• on cleaning up the economic stable, sustained economic sequence could be adopted, environment, improving the growth. In the coming two or especially for market opera• economic order and making three years, the stress should tion mechanisms centred on sure that inflation in 1989 be laid on harnessing the eco• price reform. As these unfold, would be consiberably lower nomic environment, eliminat• reform should commence of than in 1988. All other econo• ing destablizing factors and the enterprise joint-stock sys• mic work has to be subordinate reducing inflation from its tem with the aim of clarify• to these tasks. present 10 percent to 3 or 4 ing property relations so as to In addition, the Third Plen• percent in 1990. Thus room switch macro-economic man• ary Session endorsed in princi• could be created for possible agement from direct to indi• ple a preliminary programme price hikes caused by future rect control and regulation. for price and wage reforms for price reforms. In this way, the foundations the coming five years and be• To stablize the economy, re• would be firmly laid for the yond. It asked the Slate Coun• form measures including im• situation where "the state re• cil gradually, steadily and in proving the mechanism of gulates the market and the light of reality and the re• macro-economic control and market guides enterprises." quirement of pulling down the regulation should be adopted. Since the summer of 1988, prices to put this programme Efforts should be made to spiralling inflation has become into practice. strengthen the enterprise con• a major barrier to continued Of course, deepening the re• tract responsibility system in reforms, making it necessary forms is not merely a matter preparation for a transition to for China to focus its short- of readjusting prices, but in• a joint-stock system. At the term efforts on stabilizing the volves reforms in all fields, same time, the development of economy by curbing inflation. especially concerning enter• the market should be promot• This has rendered the third prises. Measures effective in ed, market management rules view the most feasible and arresting inflation should be be formulated, and a limited practical. The 13th Party Cen• carried out continuously. I am range of necessary price read• tral Committee's principles convinced that China's econo• justments and reforms con• and policies for improving the mic reforms and construction ducted. economic environment, recti• will inevitably advance with After three years of reforms fying the economic order and new vigour when the economic featuring "steadiness," factors deepening reform in an all- environment is improved and destablizing economic life round way adopted at its third the economic order is straigh• should by and large have been plenary session last September tened. •

Soviet officials examine a consignment of Chinese potatoes. HII WEI SHANDONG PENINSULA (I) A Headland of Economic Progress by Our Correspondent Lu Yun

he Shandong Peninsula, celerate and a series of prefer• and companies from all parts jutting out into the Yellow ential measures have had to be of the globe. Sea on China's east coast, drawn up to encourage ov• "Within the province itself, Tbecame an open economic zone erseas investment and co• we aim to open the eastern in the spring of 1988. Al• operation. On a recent tour of coastline as widely as possible though its 57,666 square kilo• the peninsula, it was clear that to the outside world, and then metres and 26.72 million peo• work had started in all these tie the western hinterland into ple only comprise one-third of areas. What, however, made an overall programme of de• the area and population of the deepest impression was the velopment which promotes the Shandong Province, its gross enhanced popular to open the whole of Shandong." industrial and agricultural economy to the outside world. Already some previously output amounts to 55 percent The mayor of Qingdao, Guo unknown places have begun to of the provincial total, while Songnian, said that in the past establish themselves as more its exports account for 70 per• China had missed one oppor• than a name on the map. Song cent. tunity after another, "but the Xihuan, deputy mayor of Wei- Under the jurisdiction of the adjustment of the world's eco• fang, said his city had become zone are seven major cities (all nomic structure has given us famous around the world since of which opened to the outside one more chance—we mustn't it held its first international world in 1984) encompassing let it pass. Although we have kite festival in 1984. "As peo• smaller cities, counties and accumulated experience over ple have come to Weifang, districts. many years, every time we conservative ideas and the Shandong Province has a have missed an opportunity, feeling of being separated strong economy and a long his• we have fallen behind. If we from the rest of the world have tory of international trade. In don't catch up soon, then the been pushed aside. Over the 1987, it led the country in agri• country will face a desperately past few years, we have sent cultural output value and was serious situation." more than 100 groups on in• the second most productive But Jiang Chunyun, the spection tours overseas, and province in terms of com• governor of Shandong Prov• the number of foreign visitors bined industrial and agricul• ince, pointed out the re• and business representatives tural output value. Its gross gion possesses sufficient ad• coming to Weifang every year product and foreign trade vol• vantages to enable it to seize has increased from 2,000 a ume ranked in the national top the opportunities now on of• year to 10,000. three. fer: "First, it's on the coast. "Our biggest worry is the It now has economic relations Second, it has a large peninsu• lack of competent personnel with over 150 countries and re• la. And third, it has 20 har• with a thorough knowledge of gions around the world and ex• bours and a reasonably well- foreign economic and trade re• ports more than 1,100 com• developed sea transport lations. We're not well- modities. network. To develop economic informed, and we lack exper• co-operation with other coun• ience of participation in in• tries we will have to work ternational activities." Export Expansion hard, but this means there is Many people in Yantai and plenty of scope for people with Weihai said there had been The establishment of the talent. some major shifts in ideologi• open economic zone has called .- "Ifs the world we're now- cal consciousness in the ar|ia. for industry on the Shandong looking to—we want to con• They spoke of the widespread Peninsula to become yet more duct economic and technologi• desire to develop an export- export-oriented. Infrastructur- cal co-operation on the basis of oriented economy—not be• al construction has had to ac- mutual benefit with businesses cause of orders passed down BEIJING REVIEW, JA|^fty 2-8, 198f 25 mm from higher authorities, but capital, including a series of tries include foodstuffs, tex• because people believe it will graves for horses buried alive tiles, silk, garments, handi• improve the region. They are along with the deceasede an• crafts, electronics, machinery, quick to point out this is not cient masters. Weifang has rubber, chemicals, building simply a matter of following an important selection of pa- materials and non-ferrous me• the latest trend, but of want• laeoontological fossils and a tals. ing to develop the peninsula's large array of local folk arts. Among its most famous many advantages. The foreign But perhaps most unique is the products are Qingdao's beer, exchange that flows in does video showing in the Penglai refrigerators and washing not go on cars, ease and com• Pavilion of a five-hour mirage machines, Zhangyu wine and fort, but on importing urgent• recorded in 1988. wooden •clocks from Yantai, ly needed technology, equip• The Shandong Peninsula Longkou's vermicelli, Wei- ment and raw materials for has a well-developed transport fang's computers, tape recor• production. network. The density and ders and silver-inlaid furni• quality of its highways are ture, Zibo's pottery and porce• the highest in China, railways lain, and Weihai's carpels and Rich Resources criss-cross the region, 15 embroidery—all of which are domestic air-routes operate sold both at home and abroad. Shandong is rich in natural from Qingdao, Yantai, Wei• Qingdao is also the home of resources. hai and Weifang and chartered China's ocean scientific and • A total of 122 minerals have flights link Qingdao to Hong research centre. been discovered in the prov• Kong. Its harbours can handle The problems facing the ince, of which 74 have verified 50 million tons of cargo a year, peninsula, however, are a lack reserves of 83 billion tons. The and the ports at Qingdao, Yan• of qualified personnel, adv• major ones located in the open tai, Longkou, Weihai, Shijiu anced technology, funding and zone are gold, graphite, mar• and Lanshantou have all been managerial expertise. It is ble, granite and bauxite. opened to the outside world. hoped to overcome them • The open zone abounds in As one the most populous through co-operation with for• peanuts, fruit, tobacco, silk• areas in China, the open eco• eign countries. worm cocoons and vegetables, nomic zone has an enormous while there are favourable supply of skilled labour. In conditions for the develop• 1987, its total industrial Open Wider ment of textile and light indus• and agricultural output val• tries. ue reached 59 billion yuan, of On several occasions,Shan• • Some 260 species of fish and which 4.9 billion yuan came dong Governor Jiang Chun- marine animals can be found from exports. Its major indus• yun has announced that the in Shandong's coastal waters, and the province leads the na• tion in its output of prawns, sea cucumbers, scallops and abalones.^ Prawns, shellfish and kelp can be raised on its 200,000 hectares of tidal beaches, although only 47,000 hectares have so far been put to work. Each year, 2.82 mil• lion tons of crude salt is prod• uced along Shandong's 3,024 kilometres of coastline. • Tourism is a major money- earner thanks to the heal• thy climate and picturesque scenery of Qingdao, Yantai, Weihai and Rizhao, all of which are dotted with resorts and rest homes. Zibo has the ruins of the 2000-year-old Qi

26 -SEIJING kMviEW, JANUARY 2-8, 1989 Shandong Peninsula will open to include construction, ocean been completed and started to the world in an all-round fishing, agricultural projects operation, and some have al• way. He has said that the do• and public health facilities. ready yielded substantia] eco• main for co-operation is broad, Overall, the province has in• nomic returns. For example, ranging from industry and troduced 1,300 items of adv• all the output of the Huamei commerce, through finance, anced technology and retooled Machine Embroidery Co., a science and technology, to ed• 760 enterprises in the past few Sino-US joint venture, has ucation and tourism. years. Qingdao alone invested been sold to the United States He has welcomed foreign 1.7 billion yuan in the moder• and Canada. Since the com• companies to invest, trade nization of its enterprises from pany went into production less and develop the province's re• 1984-87 (for 1980-83, the fi• than two years ago, it has re• sources, modernize enterpris• gure was less than 400 million couped its initial investment es, establish tertiary industries yuan), creating an extra 6 bil• of US$6 million. Similarly, it and open processing factories lion yuan's worth of output. only took the Huajia Toys for agricultural and sideline Of Qingdao's imported tech• Co., a joint venture backed products. The peninsula is also nological items, most (around by Qingdao and a Hong Kong looking for exchanges of infor• 86 percent) were developed in company, three months to go mation, personnel and tech• the late 1970s and early 1980s, into operation. Ever since, or• nology with overseas coun• laying the foundations for a ders for its products have tries. successful range of consumer poured in. Jiang says the open zone of• goods. Its televisions, refriger• At the same time, several fers a wide range of flexible ators, washing machines, ca• joint ventures have also been measures to foreign business• meras and air-conditioners are established employing various es, including help with joint known across the country as forms of advanced technology ventures, co-operative enter• the city's "five golden flow• involving lasers, holograms, prises and wholly foreign- ers." Almost all of them have monocrystalline silicon, var• owned enterprises, processing benefited from the introduc• ious new metallurgical materi• imported materials and com• tion of foreign technology. als, etc. pensatory trade. For example, there is the All the newly opened cities The open zone has defined Qingdao-Liebherr refrigera• on the peninsula have received a number of key projects for tor, manufactured in partner• a large boost from foreign in• capital construction and tech• ship with a company from the vestment. Since October 1987, nological transformation. To Federal Republic of Germany, Weihai has signed 27 contracts gain foreign investment, these which won a World Health on the utilization of US$56.84 will be opened to competitive Organization contract against million of foreign capital, tendering or contracted or fierce competition from Japan, US$36.62 million of which has leased to foreign companies. A the United States, the Federal been put to work. In Weifang series of export processing dis• Republic of Germany and Ita• during the nine years to 1987, tricts are planned for Qingdao, ly. There is also the Agfa ca• only seven joint ventures were Yantai, and five other cities mera production line whose established. But in 1988 eight where co-operation from over• top-quality cameras are fa• more arrived, and foreign in• seas companies will be warmly mous across China and sell vestment equalled half the to• welcomed. well throughout Southeast tal for 1978-87. Zibo, one of Shandong's opening to the Asia. China's five major pottery and outside world has proceeded at After three years of invest• porcelain production centres, a rapid pace in the last few ment and construction, the has linked its key enterprises years. The province has Qingdao and Yantai econo• into a series of 35 conglomer• signed 1,469 contracts involv• mic and technological devel• ates embracing construction ing US$2.57 billion of foreign opment zones have begun to materials, silk, porcelain and capital and has established 91 attract a large amount of ov• pottery, towelling, and manu• joint ventures, co-operative erseas funding. Together, they factured goods to co-ordinate enterprises or wholly foreign- have signed 139 contracts in• production and export. owned enterprises. volving a total investment of One of the most successful The range of overseas pro• 840 million yuan, of which' joint ventures on the Shan• jects undertaken by its con• US$80 million has come in dong Peninsula is the Huarui tract engineering and labotirl foreign exchange. (Zo., which has produced 2 mil• service companies has widened' To date, 72 projects have lion sets of steel covers for oil

BEIJING REVIEW, JANUARY M)'i^9 27 telephone lines will be opened in the near future. The regions airports will be expanded and more international flights ad• ded. In the open cities, overseas financial organizations can open their own branches or establish joint venture banks, ' and soon real estate and finan• cial markets will start up. To enhance efficiency in Qingdao and Yantai, all foreign affairs organizations are concentrat• ed in one building and service centres for foreign enterprises have been set up. Meanwhile, plans have been prepared to simplify entry and exit proce• dures for foreign business re• One of the workshops in the Weihai Carpet Plant. P)irf« hy LU YUN presentatives and to cut bureaucracy so that important drums, exporting half of them. profitable to invest in China. transactions can be handled Its Singaporean general mana• within 10 days. ger, Chou Charng Li, said the The open zone has delegat• wages and bonuses of his 50 Attracting Investment ed powers to examine and ap• staff are determined in accord• prove projects to lower author• ance with Singaporean prac• Across the Shandong Penin• ities: all projects involving the tices: they can rise a|nd fall sula, work is pressing ahead to processing and assembling of depending on the responsibili• strengthen the region's infras• supplied materials and semi• ties, technical skills and prod• tructure, improve efficiency, finished parts can be passed at uctivity of each individual and develop and implement county level; enterprises pro• worker. The gap in bonuses is preferential measures so as to cessing supplied materials as wide as is 160 yuan, and create an environment fit for have their own export powers; in basic wages, 110 yuan. No international business. the relevant department can worker is permitted to reveal Yantai Harbour's extension approve the use of foreign the actual size of his or her project should be completed capital for the technological wage packet to a colleague—if this year, raising its annual transformation of old enter• they do, their bonus will be handling capacity from 7 mil• prises; and the establishment recovered and their basic wage lion tons to 12 million tons. of joint ventures, co-operative lowered. Qindao has expanded its oil- enterprises, wholly foreign- With such discipline, the loading terminal, and prepar• owned enterprises and con• company's production and ations are being made to in• tracts for overseas engineering management are in good or• crease port facilities at Wei• projects and labour services der. The partners in the ven• hai, Shijiu and Lanshantou. can be passed by city authori• ture respect and co-operate Construction of the ties. with each other, and prospects Qingdao-Yantai highway will Foreign companies investing for the future are bright. be finished this year, and plans in the peninsula will be giv• Chou maintains that with ef• have been drawn up for a cir• en tax reductions, exemptions forts redoubled, the Qingdao cular highway linking Qing• and other preferential treat• development zone should dao, Weihai, Yantai and Wei- ments depending on the nature prove highly attractive for for• fang. Telecommunications of their involvement. They are eign investors. He said that have been streogthened with also free to hire general mana• wages were much lower than the incorporation of a num• gers and other managerial per• in Singapore, which more than ber of programme-controlled sonnel and technical staff compensated for the problems switchboards and a series of fftjm either within China or of low efficiency and made it international direct-dialling abroad. •

28 BBFJUNG REVIEW, JANUARY 2-8, 1989 USINESS/TRAjDE

Growth Slows in Development Zones

he tide of foreign capital should be curtailed," adding, redirected funds originally in• T flowing into China's 13 however, that the country tended for housing and hotels, economic and technologi• would continue to encourage and Ningbo City has received cal developmeflt zones looks foreign businesses to invest in US$140 million investment likely to slow in 1989 because • new enterprises and already- from the China National Me• of the measures adopted to sta• existing factories and work• tals and Minerals Import and bilize the economy and curb shops. Export Corp. and the China inflation. He went on to stress that the National Technical Import The development zones have economic readjustment did and Export Corp. in return for been established outside 11 not mean China was abandon• the right to manage the zone. of China's coastal cities since ing its open policy, and all Qingdao has also succeeded in 1984. They cover 117 square contracts signed with foreign initiating two major construc• kilometres and have received companies would be fully hon• tion projects. 2.4 billion yuan in government oured. State Council official Ji grants and bank loans. With Nonetheless, the cutback on Chongwei has said that the de• this money, they have levelled domestic investment has den• velopment zones should scru• 14.75 square kilometres of ied the development zones the tinize potential foreign inves• land, constructed basic factory financial resources they prin• tors carefully, and strictly and communications facilities cipally relied on to continue control investment in process• and laid on water and electric• capital construction projects ing and consumer goods. The ity supplies. In order to attract and new investment. Most of zones should use their limit• foreign capital, they offer pre• them have now had problems ed funds on projects suited ferential treatment to overseas repaying debts—Tianjin has to China's long-term devel• investors, with measures simi• been the only one to repay a opment strategy—principally lar to the ones in the Shen• major loan of 40 million yuan. ones involving advanced tech• zhen, Xiamen, Zhuhai and Because of this, the develop• nology, replacing materials Shantou special economic ment zones have searched for and products that have to zones. alternative financial sources. be imported at present, and By last September, foreign The Fuzhou government has which improve the investment companies had put money into An overseas businessman visits Tianjin's stand at an exhibition organized to 392 enterprises in the develop• promote China's technological and economic development zones. YU£ HMTAO ment zones. In the first nine months of 1988, these compan• ies exported goods worth ar• ound US$200 million. In October, however, the Chinese government declared that action was necessary to stabilize the economy, control the money supply and curb the 17 percent inflation rate. To this end, it adopted a series of measures cancelling the allo• cation of new funds, raising the bank rate, cutting back on construction projects and de- Creasing the numbers of new loans. China's Premier Li Peng de• clared on a visit to a joint ven• ture construction site, "The.: speed of construction in China •

BEIJING REVIEW, JANUARY l-S^mSSP 29

i E environment. for four port projects with many problems remained to With these guidelines, Fuji- the World Bank, and another be overcome, particularly the an has incorporated an "Adv• three are expected to be con• lack of basic facilities. The anced Technology Area" in its cluded shortly. major tasks that face the coun• development zone, and Qing- As a result of this, a total of try's shipping industry are in• dao has plans for an "Exper• seven container and two coal- creasing the cargo handling imental New Technology De• loading berths have already capacity and modernizing velopment Area." Dalian, been completed in Shanghai, loading machinerty. Shanghai, Guangzhou and Tianjin and Guangzhou, ad• Tianjin are now looking to ding 700,000 standard contai• by Li Ning transnational corporations for ners and 4 million tons of new funding. goods to China's annual port by Yue Haitao and Li Ping handling capacity. Another 35 million tons of Export Ban coal loading capacity has also been added at Qinhuangdao For 6 Items More Steam for and Shijiu using loans from the Japanese Overseas Eco• rom January 1, China Shipping Trade nomic Co-operation Funds. banned exports of six com• When all the projects under• F modities and added 12 ith the large-scale use taken with the loans are com• others to a restricted list be• of foreign funds, Chi• pleted, China will have an ex- I cause of domestic shortages. W na's shipping trade has tra 21 berths. The ban, passed by the Min• developed rapidly over the last China's shipping companies istry of Forcing Economic Re• decade, Vice-Minister of Com• have established joint compan• lations and Trade (Mofert), munications Li Zuyi said at ies and representative offices covers copper and copper- a recent symposium on ocean across the five continents of based alloys, aluminium and shipping. the globe. At the same time, aluminium-based alloys, pla• To meet the needs of the ex• various foreign shipping com• tinum, yellow phosphorous, panding foreign trade, since panies have formed co• nickel and nickel-based alloys, the early 1980s China has built operative enterprises or and nickel products. a series of fully mechanized opened representative offices According to Mofert, export and container ports and deep in China. I licences already issued for water berths capable of han• China is now a member of 11 these commodities will remain dling 30,000-100,000 ton ships. international shipping organi• valid, but deliveries must be Now the country has 190 zations and a party to more ports along its 18,000 kilo• than 30 international shipping made before February 28. metres of coastline, 41 of treaties. Co-operative or bila• Regulations banning the ex• which are open to overseas teral ocean shipping agree• port of four other commodities shipping. Shanghai remains ments have been signed with —musk, natural bezoar, raw China's major port, having 36 countries. polythene materials and mona- handled an annual total of The Ministry of Communi• zite—will remain in effect. over 100 million tons of goods cations has also signed an The 12 commodities on the in the last five years. In addi• agreement on inland shipping restricted list are polypropy• tion, there are anofher 25 with with France and contracts for lene, chromium ore, molyb• an annual capacity of more several inland water transport denum ore, metallic magne• than 1 million tons each. It projects with the Federal Re• sium, metallic manganese, abs also has 212 deepwater berths public of Germany. resin, polystyrene, methylben- capable of takijig ships of 10,- The dead weight tonnage zene, xylene, ferrochrome, fer- 000 tons or more. (DWT) of China's Ocean end romanganese and rubber. Since the Chinese govern• offshore shipping fleets has Exporters of these commodi• ment promulgated the Tem• reached shipped 12 million ties will have to apply for ap• porary Provisions on Prefer• tons, making the country one proval from the Ministry of ential Treatment for Sino- of the world's major shipping Materials and Equipment and Foreign Joint construction of nations. then obtain licences from the Ports in September 1985, loan Despite the rapid develop• trade authorities. agreements have been signed ment, vice-minister Lin said by Li Ning

30 JB^ijfNG REVIEW, JANUARY 2-8, 1989 BU

senior official of the fair's de• The "erect" series products HKShow for legation and deputy director for male-users. of the Beijing Municipal Com• Zhonghua Wu Ji Jing (Black Beijing Hi-Tech mission for Foreign Economic Chicken Essence). Relations and Trade, Beijing Chinese medicinal herbs. he Hong Kong Exhibition is seeking to develop multi• Textile Dyeing and Printing T Centre will play host to lateral economic co-operation Products the Beijing New Technol• and trade with companies Luminous printing. ogy and Products Fair '88 from around the world. He. Chameleon printing. from March 2-6 —the first welcomed overseas enterprises Coloured-knot dyeing. large-scale technological prod• to invest in Beijing. Garment pattern setting ucts exhibition to be held by To date, Beijing has 384 technology. the city outside China's main• foreign-invested enterprises, Fine Chemicals land. bringing with them US$1,777 Ultra purity reagents and More than 100 companies, billion in foreign capital 200 dyestuffs. enterprises and research insti• of which have gone into opera• Mei-Di MD-2 chemicals for tutes will participate in the tion. In the first 11 months of processing colour photograph• fair, displaying more than 600 1988, they earned US$12.56 ic paper. new technological products de• million in foreign currency. Long-lasting luminous ma• veloped in the last few years. The products on view at the terials with active agent Zou Zuyie, director of the New Technology and Products PM147. Beijing Municipal Commis• Fair fall into the following ca• New Metals Technology sion for Science and Technol• tegories: Fine wire products. ogy, said orders could be ac• Laser-related products Ultra high efficiency alloy cepted or co-operative prod• Multi-channel intelligent television antennae. uction and sales agreements laser image system with Tungsten-cerium electrodes. signed for most of the products synchro-acoustics for large Stainless steel colouring on display. screen display. technology. Beijing is not only China's Computerized Chinese text Construction Materials major centre of scientific re• editing and laser typesetting High strength, mouldable vi- search and development, but system. nylon asbestos replacement. also the country's largest tech• Silica image generation. TN-LG and TN-LB fire re• nology market. Its annual Bioengineering sistant, heat barrier paint for trade in technological items is Production of 6-APA and steel structures. estimated at around US$200 T-ADCA through immobil• million, and it has around ized cells. by Yue Haitao 1,700 scientific institutes Thymus peptide for injec• staffed by 140,000 personnel, tion. half of whom are scientists or Animal estrongen-zeranol. technical experts. New Materials News in Brief Zou said that Beijing ranks Titanium gold technology. first in the country in terms of Super magnets (Nd-Fe-B) the numbers of its new inven• and permanent magnetic al• tions in the last seven years loys. • Philip Morris Asia Inc. has it has accomplished around Artificial jewelry. donated US$50,000 for a train• 1,000 important scientific re- Optical crystals. ing course in the treatment of suh\h year. He added Medical Equipment and Health disabled people. The course that one-third of state prize- Materials will start at Wuhan's Tongji winning scientific achieve• EKG multi-phase informa• Medical University in Septem• ments had been won by Bei• tion diagnosing system. ber 1989. Students will receive jing's scientists and techni• Non-invasive dynamic auto- one year's training and then cians, and that over the past detection system for cardiov• be assigned to work with the few years, the city had won ascular blood flow parameters. 51.46 million disabled people 54 invention prizes at inter• Fixation system for the across China. It is estimated national fairs held in Geneva, treatment of fractures and de• that 1,000 people will have Brussels and Paris. formities in the lower limbs. been trained by the year 2000. According to Wan Jifei, a' Anti-smoking medicine.

BEIJING REVIEW, JANUARY 2-^^\^^9 31 B Q Q Q Q B S

China Fights Back Threat of AIDS

1 he AIDS (Acquired Im• HIV antigen, a second reagent, who were infected by trans• mune Deficiency Syn• a Western blot assay, was ex• fusions of imported blood 1 drome) Study and Test tracted and purified to make products, have been experi• Centre under the Chinese Aca• a definite diagnosis. Many ser• menting with this medicine for demy of Medical Sciences has um sample tests show that this one year, and the results have recently reported in the press reagent produces reliable re• been satisfactory. It has ob• that it has already diagnosed sults, matching international viously improved their phy• eight cases of patients from standards. sique and delayed or prevent• overseas af• ed the AIDS fected by the virus carriers AIDS virus from becom• with two self- ing AIDS vic• produced ser• tims. ological diag• Another nostic re• Chinese her• agents for bal medicine AIDS, timely known as an preventing the "oral fluid to spread of this quiet AIDS," killer virus in was made by the mainland. a young phar• These reagents macist in bring hope to Jiangsu Prov• the current ince named Chinese cam• Bao Shiming. paign to diag• From more nose, treat and YANG LIMING than 200 trad• prevent the People line up at the AJDS aod Venereal Disease (VD) Prevention Exhibition in Beijing's itional Chi• spread of Zhongshan Park on December 1,1988. nese medicine AIDS. prescrip Of the two diagnostic re• Now, the centre is applying tions, Bao screened 21 kinds agents, one is called an "im- for a production licence for of herbal medicine and devel• munofluorscence reagent," increased production of the re• oped this oral fluid. With the which is used in preliminary* agents in order to meet the assistance of some related un• examinations for the AIDS vi• demand of national AIDS ex• its, Bao tested its potency rus. Its high sensitivity and aminations. and toxicity and proved that specificity has been proven Earlier, the press had re• it does help improve the body's through ten thousand serum ported the efforts of the immunity. With this achieve• tests and dozens of AIDS pa• Chinese medical circles in stu• ment, Bao composed and pub• tients' serum tests across the dying and employing tradi• lished a thesis entitled Exploit• country. Because this reagent tional Chinese medicine for ing Chinese Herbal Medicine can only be used in prelimi• the prevention and treatment for AIDS Prevention and nary tests, the centre's re• of AIDS. Treatment, drawing the atten• searchers also had to employ Some experts and professors tion of medical circles. the advanced technique of ge• in Zhejiang Province success• According to official statis• netic rearrangment to make a fully trial-produced an "AIDS tics, no AIDS cases have been further diagnosis. prescription No.l." Three found among Chinese main• From a genetic recombinant C^hinese carriers of the virus, land residents so far. But sta-

32 ,^I§.^G REVIEW, JANUARY 2-8, 1989 tistics given by some related During the week, Shanghai were sold at a price six times departments show that by the became "the world capital of higher than the cost for a end of April 1988, there were animated movies," as the cur• regular feature film. After 18 AIDS patients or AIDS vi• rent president of ASIFA put a busy viewing, judging and rus carriers on China's main• it. The president also said, choosing and a series of aca• land. Of these, 14 were for• "The fact that this big country demic exchanges, the festival eigners or overseas Chinese with a quarter of the world's came to an end on the evening who now had left the country population decided to present of November 14. or were deceased. The remain• its screen to animated mov• The festival awarded 12 ing four AIDS cases were ies from across the world is films in groups from A to F, hemophilia patients in Zhe- a main event for the cinema• with each group having two jiang Province (including the tographic art." winners. The six first-prize three J mentioned before) who Shanghai residents were winners were: The Fish Dish were infected after transfu• lucky to have a chance to see (China), George and Rose• sions of imported Vlll-factor an animated world through a mary (Canada), Breakfast on blood; one of these was de• variety of international works. the Grass (USSR), Tables of ceased. The festival attracted 386 Content (Canada), What To Since 1984, China has films from 28 countries for Do With Little Jill (Norway) banned imported blood prod• selection. Out of these, 52 and The Dyitig Maple Tree ucts, tightened AIDS quaran• films from 20 countries were (Canada). Two special prizes tines at points of entry and chosen for competition, while went to an American com• set up a national programme another 26 films, each from puterized animatation. Red's on AIDS prevention and some a different country, were Dream, and to Shooting the related laws and regulations. shown in the panorama sec• Unshot, a puppet film prod• But these are far from enough, tion. Special exhibitions fea• uced by the Shanghai Anima• according to experts. It is high tured 34 films, including tion Film Studio and directed time not only to promote international jurors' self- by Japanese director Kihachi- research on AIDS diagnosis, selected favourites and award- ro Kawamoto. Four special prevention and treatment but winners from the festivals in certificates were also given to also to educate the public on Hiroshima and Zagreb. films from China, Hungaria, the facts about AIDS. This Great enthusiasm was Australia and the USSR. will arm them with the com• shown for the festival, with As chairman of the jury, mon sense necessary to prev• more than half of the 22 mem• John Halas finally announced ent and reduce the transmis• bers of ASIFA and a number the Grand Prize winner: Feel• sion and spread of AIDS. • of international animated film ing From Mountain and Water producers coming to Shanghai (China), for "its artistic start, for the event. The fully au• exquisite animation, elegant thentic international jury of music and, above all, the Shanghai five included John Halas, excellent collaboration of all "Annie Award" winner and these elements." The film en• Cartoons: Not the founder and honorary joyed the highest voting points For Kids Oniy president of ASIFA; Osamu because it was believed to re• Tezuka, famous Japanese car• flect the best of Chinese ar• icaturist and animation artist tistic tradition, blending the he first of its kind that and the creator of the car• skills of traditional Chinese has ever been hosted in toon character "Astro Boy" painting with modern anima• T China, International An• that was popular in China tion techniques. "I'm happy to imation Film Festival, held in years ago; Cohoedeman, well- say, it was a great pleasure mid-November last year, was known Canadian animator; to view the film," John Halas organized entirely in accord• Zlatko Pavlinic from Yugos• acclaimed, "and like other ma• ance with international com• lavia and Jin Xi, the only jor festivals, the present one petition norms and practice. Chinese juror and a celebrated in Shanghai has its own char• Many considered it a match director of puppet films. acter—a discovery of China's to such major international animation, which is so beau• animation film festivals as The cinemas where the se• tiful." those in Hiroshima, Japan, lected films were shown were and Zagreb, Yugoslavia., Mways packed, mostly by ad• by Dai Gang ults, even though the ticket^

BEIJING REVIEW, JANUARY i^}'^') 33 To Our Readers ith the onset of 1989, Beijing Review enters its 31st year. As we look back as well as forward, we can see many of the efforts we have made to serve our readers better: the W special North American edition printed and distributed in the United States; Chinafrique, our sister magazine published in French; and the introduction of computerized editing and typesetting for the English, French, German and Spanish issues of Beijing Review. We have also strived to improve our reporting and writing skills, and expand our coverage. However, we are still not completely satisified—and so in the coming year we will continue to try and produce a better magazine. We realize that the development and improvement of Beijing Review are inseparable from contributions, criticisms and suggestions of our readers. Therefore we wish to take this opportun• ity to show our gratitude. We hope you will write frequently to us in the future. On behalf of the entire staff of Beijing Review, we extend our sincere greetings and wish you every success and happiness for 1989. Editor of the "Letters Column"

Reliable and Believable your efforts. Once started, restricted. Waiting around for where c ould it end? I do think the 'development of China's I have been a reader of your that you need to know how productive forces' is not going publication under its current much your efforts are ap• to solve the question of who and former names for some 20 proved and appreciated by does the shopping, cooking,ti• years. I have listened to Radio your readers. I look forward dying up,laundry and child- Beijing for a good number of to reading each issue of your care, one could have a situa• years as a shortwave listener. publication. tion of very highly developed I have visited China several Frank Westhoff productive forces and still times and will be coming for a Missouri, USA have women hampered from visit soon again. meeting their full potential in The changes that have their various jobs because of helped China realize its poten• Women's Burden the continuance of the idea tial more fully these past sev• that athe tasks of housework eral years have been a source I read with interest your ar• are solely women's responsibl- of great delight to me and I ticle on women and work in ity. look forward to more develop• the August 15, 1988 issue. I Most of the scholars from ment in the coming years. find it puzzling that in the China who have come to my Beijing Review has made discussion of women's double university over the past few many positive strides and now burden of wage employment years have been men.It is is a creditable and reliable and housework that there was amazing how many of them source of information. It is ed• no suggestion that housework have never done "housework" ited well and is a technically is something that must be before, and equally amazing good product. The new climate shared among the adult mem• how very quickly they discov• in New China bodes well for bers of a household. One can er that they do indeed know the future of not only the certainly define housework as how to shop, cook, tidy up, and Chinese but for humanity. I a part of society's division of get their laundry done when think Beijing Review reflects labour, but in a highly com• they don't have a wife around this well. plex society like China today, to do it for them. Necessity is As a Catholic priest, I would why should there be a sexual a good teacher, and I think it love to see a bit more in the division of labour that assigns necessary that the housework publication about religion in housework to women only? As issue be addressed now rather China, since this is of great long as the old idea continues than postponed to some future interest to me and I am sure to that some people are fated by date. many others as well. accident of birth to perform One hesitates to cite the certain tasks for others, wom• Norma Diamond many examples of positive im• en's rights,interests and re• provement you have made in quirements will continue to be Michigan, USA 34 BE*>fNG REVIEW, JANUARY 2-8, 1989 ART PACE

Egrets.

Ig Woodcuts by Xu Qinsong

Xu Qinsong was born in 1 952 in Chenghai County, Guangdong Province. He now is a painter with the Guangdong Studio of Fine Arts. Xu's speciality is to enliven woodcuts with his clever use of black, white and half tones. He pays great attention to the' well-wrought carvings when he paints and produces fine finished figures.

Boat.

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Song of Seeding. Jeep Cherokee

The Beijing Jeep is made for modern life. ' Its combination of advanced four- wheel drive and the luxury features of a passenger car makes driving a pleasure. For work or leisure, in the city or the countryside, the Beijing Jeep offers fun and freedom.